Property appraisers are sending out a notice of proposed taxes this month. If you're unhappy with the numbers, it's not too late to protest.
Property tax notices are easy to overlook when they arrive in the dog days of summer, sandwiched in a stack of vacation mail.
But it is worth your while to take a closer look: You have the right to protest any number that you think is wrong or unfair.
Here's a primer on how to read the notices that local property appraisers are sending out this month, explanations of some of the terminology and how to protest the tax rate.
First, realize that the August tax notice is not a final bill, but a notice of proposed taxes for the year. The numbers could change, and you can still protest the tax rate.
Earlier in the summer, the counties, cities and other entities that have the right to tax your property decided the most they could tax you this year. Each came up with a number, called a millage rate, which determines how much each property owner will pay, depending on how much the property appraiser says the property is worth. One mill equals $1 in tax for every $1,000 worth of taxable property you own.
The taxes on the notice are calculated using the millage number, but the millage rates are not final. In the next few weeks, each taxing authority will hold public hearings on its proposed tax rate. You can attend and protest the rate. Sometimes, the millage rate is lowered because of the protests.
The proposed tax bill will list a telephone number for the taxing authority and the date of upcoming public hearings if you choose to question the rate.
While the taxing authorities decide the tax rate, the county property appraiser's office determines how much your home is worth for tax purposes.
There are three numbers on the tax notice that represent your home's value for tax purposes. Here is what each one means and how it is determined.
The number under "market value" is the number that the property appraiser thinks your home is worth after subtracting the costs of selling it, including transfer fees and real estate commissions, for instance.
Many taxpayers look at the market value number and think it seems low, but the costs of selling can take 10 percent to 15 percent off a home's price. A seller may receive only $85,000 of a $100,000 home sale after paying the costs of selling, for instance.
But for some, the market value may still appear low, especially compared with what the neighbor's house sold for last week. That is because the property appraiser uses a value set for your home on Jan. 1 of this year, and that value doesn't take into account similar sales that happened after that.
Also, the county appraiser sometimes factors in sales from several recent years, which might bring the price even lower.
Still, if you think the property appraiser is wrong about your property's assessment, you can ask for a review of the appraisal.
The property appraiser doesn't tax you based on the "market value" of your home. Instead, the tax is figured using the "assessed value." If your home is appreciating rapidly, it may help that a 4-year-old law limits homeowners' tax increases to 3 percent a year or the inflation rate, whichever is less. (See related story.)
For instance, if your $85,000 home's market value increased to $90,000 in one year, a 5.9 percent increase, the property appraiser would only be allowed to tax you on 1.6 percent of that increase, because that was the inflation rate last year. Your home's market value would rise to $90,000, but its assessed value would be capped at $86,360.
There is one more factor that could affect how much you are taxed: exemptions. For instance, people who own and live in their home are allowed to exempt $25,000 of their home's value from the tax roll. So the $86,350 assessed value would fall to $61,350, called the "taxable value" on the tax notice. The "taxable value" is the final number that is used to calculate your taxes.